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Handheld rivals Microsoft and 3Com invest in mobile software firm

by John Geralds in Silicon Valley

Mobile information management company Avantgo has secured almost $15 million in financing from arch rivals in the handheld arena Microsoft and 3Com, among others.

Avantgo puts Web-enabled, enterprise and consumer applications into handheld devices, such as those based on 3Com's Palm Computing and Microsoft's Windows CE platforms. Last week it also announced that several venture capital firms are pumping $14.7 million in the company.

The privately held company also recently launched Avantgo.com, a free service that brings Web content to users of handheld devices.

Avantgo.com, which is powered by Avantgo Server technology, enables users to use personalised content offline or wirelessly in real time, the company said.

"For Avantgo, that's a significant amount of money," said Alan Reiter, president of Wireless Internet and Mobile Computing. "Just as significant are the names involved. They give Avantgo additional credibility in the market and enhances its ability sell enterprise based software," he continued.

Felix Lin, Avantgo chief executive, said, "We are delighted to have both Microsoft and 3Com as equity partners. Their investments are a ringing endorsement of Avantgo's open solutions that are driving the adoption and success of handheld devices in the marketplace."

Reiter said that both Microsoft and 3Com are committed to the handheld and wireless markets with Windows CE and the Palm line respectively. "Any money the companies have invested is pocket change to them. Their investment is a way of trying to enhance their position in the handheld device market," he said.

Additionally, Microsoft is seeking a way to bring its enterprise based solutions to the handheld devices and Avantgo technology would help there. "Microsoft is in favour of anything that helps bring its enterprise solutions to handhelds," Reiter said.

The handheld market is booming, according to analysts. Figures from IDC calculates an installed base of almost five million devices at the end of last year and predicts that by 2002, there will be more than 25 million individuals using Internet-based tools in just the US alone. Some analysts have predicted that these devices will outnumber personal computers within 10 years.

Based on those numbers the handheld-related software platform market should exceed $1 billion by 2002, Avantgo said.